Demand drivers for genetic improvement
Drivers
GROWING DEMAND FOR ANIMAL PROTEIN
The global population is expanding and urbanising, and seeking a more varied and nutritious diet. This is driving increases in consumption of pork, milk and beef, which are forecast to grow by 1–2% p.a. in the next decade.
FOOD PRODUCTION MUST BECOME MORE SUSTAINABLE
Competition for resources, such as land and water, and the need to reduce greenhouse gas emissions, puts pressure on farmers to become more efficient through the use of technology and genetically superior animals, which are proven to be more sustainable.
CONSUMERS ARE DEMANDING BETTER PRODUCTS
Consumers are increasingly demanding healthier and more sustainable products, which are raised with a focus on animal welfare, traceable and produced with fewer drugs. This increases farmers’ demand for genetically superior breeding animals, which are naturally more resilient and sustainable.
FARMS ARE CONSOLIDATING AND TECHNIFYING
Progressive farmers, who are more open to new technologies and measure performance in more detail, are consolidating the sector. They understand the economic and sustainability benefits of genetically superior animals and optimised breeding strategies, such as combining the use of sexed dairy and beef semen on dairy herds to maximise profit.
Trends in our market
PORK
Production
Pig production is largely technified with similar production systems employed by progressive producers globally. Breeding pigs and semen are typically acquired from specialist genetic improvement companies or sourced from captive breeding programmes to ‘stock’ a farm, with semen being provided periodically thereafter, enabling farmers to benefit from the latest, best-performing genetics.
Disease poses a significant risk to pig producers, who rely on biosecurity protocols and health products to manage the threat of diseases like PRRSv, a disease which causes billions of dollars of damage to the industry annually.
In China, pigs have historically mainly been produced in small ‘backyard’ farms. In 2018, the outbreak of African Swine Fever resulted in the national sow herd declining by about one-third. The resulting shortfall in pork drove the expansion of large-scale technified pig production, further aided by the legislative drive to professionalise the sector. Today, the top 50 producers control around one-quarter of the sow herd in China.
Genus Opportunity
- Maintain our genetic lead by driving genetic improvement faster than competitors and internal programmes
- Ensure biosecure supply of breeding stock and semen for progressive producers in all key markets
- Make China a ‘home market’, with local nucleus herds, supply chain and superior customer service
- Launch our gene-edited PRRSvresistant pigs, and explore technology solutions to other diseases
BEEF
Production
Beef is produced in a variety of systems globally and from many breeds, using both artificial insemination and ‘natural service’. Beef animals are often traded multiple times between birth and processing.
In the US, beef is mainly produced from pure-bred beef animals bred naturally from bulls on farm or sourced from the open market. A modest but growing portion of beef cattle is produced by breeding dairy cattle with beef semen (Beef x Dairy). Beef x Dairy uses ‘surplus’ dairy breedings to produce high-quality beef animals that are more consistent than those from pure-bred beef systems.
In Brazil, beef is mainly produced from pure-bred ‘tropical’ beef cattle suited to local conditions, but tropical cattle are increasingly being cross-bred with semen from European breeds. The resulting cross-bred calves have better meat quality and growth rates than tropical animals, and are more heat tolerant than European breeds.
Genus Opportunity
- Demonstrate the superiority of our proprietary beef genetics across the value chain through trials and partnerships
- Build on our product leadership in beef semen for dairy and tropical cross-breeding
- Develop naturally more resilient cattle, through genomic selection and gene editing technologies
MILK
PRODUCTION
Milk production systems vary due to environment, genetics and technification. The average US cow produces over 10 tonnes of milk annually compared with 2 tonnes in India. Dairy production is fragmented, but progressive farmers are consolidating. Average herd size in the US has grown by 77% over ten years, and two Chinese groups now control around half a million cows.
Historically farmers selected breeding animals based on their progeny’s performance. In 2008, genomics enabled the selection of animals at birth from their DNA, triggering the consolidation of elite genetics by studs (like ABS). Leading studs transitioned from purchasing bulls to proprietary breeding programmes. Between 2008–2022 total breeders featured in the top bull rankings fell from 107 to 31.
Sexing technology use has grown rapidly, enabling farmers to produce herd replacements from their best cows with fewer breedings, given the ~90% chance of a female. Other animals in the herd are increasingly bred with beef semen to produce a high value cross-bred beef calf. The proportion of ABS’s sales to US dairies consisting of sexed and beef genetics has grown from 16% to 76% between FY16–FY22.
GENUS OPPORTUNITY
- Maintain our genetic lead by driving genetic improvement faster than competitors
- Drive the adoption of our sexed and Beef x Dairy genetics amongst dairy farmers, to maximise their profitability
- Grow our presence with progressive industry consolidators globally
- Deploy our proprietary sexing technology with partner studs, delivering value and sustainability to the industry
Position
Genus is a leading player in global porcine and bovine genetics markets, serving many of the Top 100 pig producers and dairies globally. Investment in our proprietary genetic programmes has delivered world-leading products in all our species, validated by indices and on-farm trials. Genus is also recognised as a global leader in genomic, gene editing and sexing technologies.
